NEW YORK -- A new health care experience for consumers could be in
the offing with CVS Health's $69 billion deal to acquire health
insurance giant Aetna Inc., according to branding specialist CBX.

Industry observers say the acquisition signals a bid by CVS to ramp
up the level of care that it offers customers. CVS operates the
nation's second-largest drug chain, second-largest pharmacy benefit
manager and largest in-store clinic services, while Aetna is the
third-largest U.S. health insurer.

Yet the union of the two companies also could yield valuable
lessons for others in the health care and drug store sectors as they
seek to forge stronger ties with consumers, CBX noted.

"What interests me here is the potential for CVS-Aetna to
create new, meaningfully differentiated brand experiences for
consumers," explained Brian McDonagh, a Minneapolis-based strategy
director for CBX. "CVS has nearly 10,000 stores; Aetna covers 22
million people. If they can combine to better meet the clinical and
patient needs of such a large swath of the U.S. population, it will be a
game changer."

One key component likely will be MinuteClinic, CVS' retail
health clinic operation. The addition of Aetna could ultimately
translate into more MinuteClinics --which currently number about
1,100--with expanded menus of medical services, including those for
patients with chronic conditions. In turn, this could help CVS further
sharpen its focus on its core business and purpose--namely, to be a
health care company, according to McDonagh.

"For far too long, U.S. chain drug stores have suffered from a
bit of an identity crisis," he said. "Despite the coolers and
front-of-the-store merchandise, CVS, for one, has realized that it
isn't primarily a food seller, nor is it a discount retailer or
c-store. Increasingly, CVS has been trying to act like a health care
company."

An even stronger health care push by CVS would create some
intriguing possibilities with respect to integrated store design,
signage, packaging, naming, logos and other forms of creative marketing,
McDonagh said. Still, the actual experience of receiving health care in
these locations would likely be the biggest factor in bolstering the
brand, he pointed out.

"Potentially, this union is a step away from a disjointed,
broken [health care] system toward greater coherence," McDonagh
said. "The question is, what philosophy and mission are driving
this? Is it pure profit or a true commitment to consumer care? Given
that CVS has already demonstrated a commitment to consumer care at a
loss to its revenues--namely, by taking tobacco out of its stores--I am
glad CVS is doing the acquiring here."

More broadly, other U.S. pharmacy chains and health care-related
companies could benefit from thinking creatively about how to better
connect with their customers, and they will no doubt be paying close
attention to how the CVS-Aetna deal evolves, McDonagh added.

"Connecting is second nature to manufacturers of soda,
breakfast cereal or laundry detergent, but the calculus for health care
companies is quite a bit more complex," he said. "If CVS and
Aetna can put consumer care first and offer greater usability,
transparency and value, there will be lessons as other companies seek to
follow suit."

At the same time, CBX managing partner Gregg Lipman sounded a note
of caution about the U.S. economic trend toward vertical integration.
Although this trend could bring such benefits as lower prices, easier
access and more convenience, it also could mean significant costs as
more consumers live within closed, vertically integrated ecosystems, he
explained.

"Consumers will soon be forced to pick their 'team':
'I'm a Walmarter' or 'I'm an
Amazoner,'" Lipman said. "All of their info is in the
vertical, and so all of the value they can reap--from loyalty rewards to
custom and leveraged pricing--is in that vertical. The thing is, the
goods and services on offer are just about the same. The danger is a
growing sense that Big Brother is truly here. Is that a good thing for
consumers? Could it eventually spark a backlash?"